The annual turnover of the whole gas separation plants industry in China hit a record high of RMB 18.2bn ($2.89bn) in 2017, an increase of around 25% over 2016.
Corresponding profit in 2017 was RMB 810m ($128.8m), a remarkable 12-fold increase.
The news come from a meeting held by the country’s Gas Separation Plants Association, under the China General Machinery Industry Association in late April.
Mr. XU Jianping, Secretary of the association said that after analysis, the major part of the profit comes from the gas business sector of Hangzhou Hangyang and Sichuan Air Separation Group. Profit from the manufacture of air separation plants (ASUs) accounts for only RMB 200m ($31.8m).
XU further said that in 2017, the whole industry signed contracts for more than 30 sets of ASUs with a capacity of more than 70,000 Nm3/h, of which about half was signed by Hangyang and the rest shared among Linde Engineering (Hangzhou), Air Liquide (Hangzhou), Air Products, Hangzhou Fortune Gas, and Kaifeng Air Separation.
He explained that, as China put more emphasis in the development of new coal chemistry industry such as coal-to- gas, coal-to-oil, and coal-to-methanol, there would be a new wave of demand for gas separation plants – as already observed from end of 2016. In terms of oxygen generation capacity of these new gas plants, 45% has gone to coal chemistry, 30% to oil refineries, and 25% to metallurgy.
However, XU pointed out that the supply was still much more than the demand in the equipment market, and the issue of over-capacity had not been basically solved. Further still, although the market is getting warm and presents an upward trend, contract prices are still on the low side and therefore leading to profitability staying at less than 2%.